Economic Development

- Industrialization and Economic Development -

Economics

Economics is the study of :

1. production of goods and services.

2. distribution of goods and services.

3. consumption (purchasing) of goods and services.

Economic Geographers study how people make a

living.

Economic Globalization

Interdependence of national economies through movement of goods, service, technology and capital ($$$).

Much of the world's economic activity is now transnational.

How is the economic development of a country measured? See next slides …

How is the economic development of a country measured? (1/4 )

Key Terms Per Capita Income: Per person income.

Gross National Product (GNP): Total production of goods and services by a country within a year.

Gross Domestic Product (GDP): Total production of goods and services within a country during in a year

Range of World GNP

World Average…………………….$4920 Developed Countries…………...$19,310 Developing Countries……………$1,120 Lowest GNP………….$80. Mozambique Highest GNP……..$41,210 Luxembourg

Mozambique $80 USA

$26,980

Luxembourg $41,210

World Average $4920

Developing Average $1,120

Developed Average $19,310

How Is The Economic Development of a country Measured? (2/4)

Demographic (characteristics of a human population) Signs of Development

Developing Countries

– high birth rates (5%)– high infant mortality (150+)– high fertility (7.4)– high pop under 15 (50%)– low pop over 65 (1%)– short life expectancy (43 yrs.)

Developed Countries

– low birth rates (1%)– low infant mortality (.4%)– low fertility (1.1)– low pop under 15 (15%)– high pop over 65 (18%)– long life expectancy (80 yrs)

Social Signs of Development

Use of consumer goods: phones, TV’s, computers Distribution of wealth & services

– health care availability number of physicians per capita

– education availability Literacy

Let’s look at the following slides …

How is the economic development of a country measured? (3/4)

How Is The Economic Development of a country Measured? (4/4)

Structure of the Economy

Economic activities are divided into categories of increasing complexity– Primary Sector– Secondary Sector– Tertiary Sector– Quaternary Sector

Primary

Secondary

Tertiary

Quaternary

Economic Sectors: Structure of the Economy

Primary Industry: extraction of resources from the earth.– Generally, through agriculture, mining, fishing

and forestry.– EX:

farming, lumber, harvest.

Economic SectorsStructure of the Economy

Secondary Industry - processing and manufacturing of resources

manufacturing

Economic SectorsStructure of the Economy

Tertiary Industry - distribution of goods and services. Employs most people in the labor force in developed countries.

Ex: trucking, banking, retail store outlets, groceries

Economic SectorsStructure of the Economy

Quaternary Industry - processing and dissemination of information

The “Information Economy”, services related to information and research.

education, research & development, cyber space

Measures of Development

Consumer Goods (examples?)Fertility Rate

Infant Mortality Rate

Fertility and Infant Mortality Rate

Developing countries have higher fertility rates than developed countries.

Developed countries have lower infant mortality rates than the developing countries.

Economic Theories

Classical Liberalism

Neo-Liberalism

Dependency Theory

Globalization

Classical Liberalism

An economic system functions best when there is no interference by government.

“Laissez-faire” (hands off, leave things alone!)

Neo-Liberalism

– Private enterprise

– Liberalized trade

– Open markets

– Maximized role of private sector to determine political and economic priorities of the state.

Dependency Theory

Resources flow from a poor and underdeveloped states to a "core" of wealthy states, enriching the latter at the expense of the former.

What about Globalization Theory???